Fees and Compensation
Our Wrap Fees
All investment management clients will be required to execute an Investment Management Agreement
that will describe the type of management services to be provided and the fees, among other items.
Clients are advised that they may pay fees that are higher or lower than fees they may pay another
advisor for the same services and may in fact pay lower fees for comparable services from other
sources. Clients are under no obligation at any time to engage or to continue to engage, CHB for
investment services. CHB asset management fees generally range from 0.50% to 2.00% per annum of
the net market value of a client’s account managed by CHB. Clients may pay a different fee in each
account dependent on the assets within that account. Fees are negotiable and may be higher or lower
than this range, based on the nature of the account, and the origin of the client. Factors affecting fee
percentages include the size of the account, complexity of asset structures, and any other unique factors
that may exist. All clients, but especially those with smaller accounts, should be advised they may
receive similar services from other professionals for higher or lower overall costs.
For clients whose assets are managed by the firm, investment advisory fees will be debited directly
from each client’s account. The advisory fee is paid quarterly, in advance, and the value used for the
fee calculation is the net value as of the last market day of the previous quarter, including any cash in
the client’s account. For example, if your annual fee is 1.00%, each quarter we will multiply the value
of your account by 1.00%, then divide by the number of days in that calendar year and multiply that
number by days in the quarter to calculate our fee. To the extent there is cash in your account, it will
be included in the value for the purpose of calculating fees only if the cash is part of an investment
strategy. Once the calculation is made, we will instruct your account custodian to deduct the fee from
your account and remit it to CHB.
Clients whose fees are directly debited will provide written authorization to debit advisory fees from
their accounts held by a qualified custodian chosen by the client. CHB is to invoice the qualified
custodian for fees. Each quarter, the client will receive a statement from their account custodian
showing all transactions in their account, including the fee. CHB encourages clients to carefully
review the statements and confirmations sent to them by their custodian, and to compare the
information on reports prepared by CHB against the information in the statements provided directly
from the custodian. Please alert CHB of any discrepancies.
There are a number of other fees that can be associated with holding and investing in securities. The
fees not included in the advisory fee for our wrap services are charges imposed directly by a mutual
fund, index fund, or exchange traded fund which shall be disclosed in the fund’s prospectus (i.e., fund
management fees and other fund expenses), fees for trades executed away from the custodian, mark-
ups and mark-downs, spreads paid to market makers, wire transfer fees and other fees and taxes on
brokerage accounts and securities transactions. Expenses of a mutual fund or ETF will not be included
in management fees, as they are deducted from the value of the shares by the manager. When selecting
mutual funds that have multiple share classes for recommendation to clients, CHB will take into
account the internal fees and expenses associated with each share class, and it is CHB’s policy to
choose the lowest-cost share class available, absent circumstances that dictate otherwise. For complete
discussion of expenses related to each mutual fund or ETF, you should read a copy of the prospectus
issued by that fund. CHB can provide or direct you to a copy of the prospectus for any fund that we
recommend to you.
Schwab has eliminated commissions for online trades of equities, ETFs and options (subject to $0.65
per contract fee). This means that, in most cases, when we buy and sell these types of securities, we
will not have to pay any commissions to Schwab. We encourage you to review Schwab’s pricing to
compare the total costs of entering into a wrap fee arrangement versus a non-wrap fee arrangement. If
you choose to enter into a wrap fee arrangement, your total cost to invest could exceed the cost of
paying for brokerage and advisory services separately. To see what you would pay for transactions in
a non-wrap account please refer to Schwab’s most recent pricing schedules available at
schwab.com/aspricingguide.
We do not charge our clients higher advisory fees based on their trading activity, but you should be
aware that we may have an incentive to limit our trading activities in your account(s) because we are
charged for executed trades. Additionally, because of the nature of a wrap program, wherein clients
pay one fee for advisory services as well as certain transactions, the actual fee to the firm will vary as
the transaction costs charged to the program vary. This means that if transaction costs go down, either
because the account is traded less or because the cost per trade goes down, the firm’s fees for the same
advisory services will increase. Likewise, if the costs increase, the firm’s advisory compensation will
decrease.
The intention of the wrap program is to have CHB absorb the occasional transactional costs associated
with trades in the client accounts.
Please make sure to read Item 12 of this informational brochure, where we discuss broker-dealer and
custodial issues.
Pro-rata Fees
If a client becomes a client during a quarter, they will pay a management fee for the number of days
left in that quarter. If clients terminate the relationship during a quarter, they will be entitled to a
refund of any management fees for the remainder of the quarter they may have prepaid. Once the
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